NFIB:Small Business Optimism Below Average

The National Federation of Independent Business' Optimism Index came in at 90.2 for October,up 1.3 from September.This was below the year to date average of 91.1,and only a little better than the average since January 2009 of 89.1.The gain was mainly the result of less negative views about prospects for real sales and business conditions,NFIB said.
Basically we've gone nowhere since the recession ended,according to Bill Dunkelberg,NFIB Chief Economist.We're thinking the economy will be worse three years from now than better.Sales expectations are still low.I expect it to continue that way for some time.
We've gone through a big period of inventory and staff reduction.We're kind of set for the relatively weak level of consumer spending that we have to deal with.It is a demand problem.Until that changes,we're not gonna be doing any hiring.Consumer sentiment is the worst since 1980.
The NFIB Optimism Index usually leads the market a little bit,Mr.Dunkelberg observed.
Small business generated 65% of net new jobs over the past 17 years,the Small Business Administration claims.

Conference Board:Where The Arrow Points

The Conference Board says that economic indicators point to continued weak growth through fall and winter.The Board's Index of Leading Economic Indicators increased 0.3 in August following a 0.6 increase in July and a 0.3 increase in June.
According to CB economist Ataman Ozyildrim,the August increase was driven by components measuring financial and monetary conditions which offset substantially weaker components measuring expectations.The growth trend in the LEI has moderated and positive and negative contributors to the index have been roughly balanced.The indicators point to rising risks and volatility,and increasing concerns about the health of the expansion.
Ken Goldstein,another CB economist,said there is growing risk that sustained weak confidence could put downward pressure on demand and business activity,causing the economy to potentially dip into recession.While the chance of that happening remains below 50/50,the odds have certainly increased in recent months.
The Conference Board is a global,non-profit,independent business membership and research organization working in the public interest.It strives to provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society.

Wall Street Partner:Improvement Will Be Muted

Alison Deans,a partner at the newly-formed Varick Asset Management and a CNBC contributor,says corporate America is gonna do very well in 2011,but fears of rising interest rates will hold back multiples expansion-or improvement in measures of a company's financial well being-while that change is happening.We will be beneath 2007's all time highs.
What's coming through from Washington is more important for business confidence.The increase in hiring will take place in the second half of 2011.We're looking at 2.5-3%Gross Domestic Product growth for the new year.There will be a lackluster first half,and a better second half.
Unemployment may possibly dip beneath 9% in 2011,Ms.Deans thinks.A Wall Street veteran,she had previously worked for Lehman Brothers and Neuberger Berman.